Pay data has revealed that UK pay awards have stalled, with almost four fifths of workers receiving lower wage rises than in 2024.
Median basic pay awards in the UK remained stuck at 3 percent for the eighth consecutive rolling quarter, according to data from HR insights provider Brightmine.
The figures highlight ongoing employer restraint on pay, with most settlements falling short of those agreed in 2024 for the same employee groups.
Pay stagnation comes despite modest GDP growth of 0.3 percent and a cut in interest rates to 4 percent by the Bank of England (BoE).
Employees will be more likely to notice their pay packets tightening as inflation rose to 3.8 percent today. This is the highest it has been in 18 months and is well above the government’s 2 percent target.
Employers also face increasing wage bill pressures and higher employer national insurance contributions, introduced in April.
“GDP may have risen, but the likelihood is that it won’t drive growth in pay awards,” said Sheila Attwood, HR insights and data lead at Brightmine. “While this improvement is encouraging, employers are continuing to be cautious when it comes to pay awards, with four in five UK employees having received smaller pay awards in 2025 compared to last year. With ongoing uncertainty in the economy, it is likely that the current pattern of pay awards will continue.”
The firm’s data also points to a cooling recruitment landscape. Job vacancies have been declining since 2022, although levels are only around 68,000 lower than early 2020. The fall partly reflects a correction from pandemic-driven hiring levels, currently some organisations are holding back on recruitment or opting not to replace departing staff.
When combined with stagnant 3 percent pay awards, the figures suggest employers are taking a cautious approach, with competition remaining for specialist roles but broader hiring slowing.
Attwood said: “The continuation of the 3 percent headline pay award is a clear sign of prevailing employer pay restraint. And while the Bank of England expects ongoing increases in inflation, many employers are continuing to approach wage decisions with caution, keeping wage rises at 3 percent, in the face of continued economic uncertainty and the looming Autumn Budget.”
The firm’s analysis of data from 19 pay awards (made between May and July 2025), covering more than 600,000 employees, shows that 78.9 percent of 2025 settlements were lower than 2024 deals.
Pay freezes remain rare, accounting for just 3.1 percent of awards. The most common award value was exactly 3 percent, with 26.3 percent of deals set at this level. And 57.9 percent of awards were between 2 percent and 3 percent.
